Mitras Analysis of News : 1-6-2017

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1.It’s time for Africa (The Hindu)

2.Too Many Regulations Are Ruining CSR (Live Mint)

3.Can India build 20 Harvards in 20 years? (Live Mint)

 

1.It’s time for Africa  (The Hindu)

 Synoptic line: It throws light on the proposal for Asia Africa Growth Corridor (AAGC) and its prospects for India and Africa. (GS paper II)

Overview

  • Increased diplomatic relations were a focus since 2015 Third Africa-India Summit, which had the largest representation of African heads of state since the summit began in 2008. The summit culminated in the 2015 Delhi Declaration, which outlines shared values and commitments between India and African states.
  • Continuing on the same lines, The African Development Bank (AfDB) recently decided to hold its meeting in Gujarat which demonstrated its confidence in recent achievements and future prospects of the Indian economy.

Prospering relations

  • The strong sense of political affinity and solidarity between India and Africa dates back to the several decades of the twentieth century when the peoples of India and Africa were engaged in an unremitting struggle to gain independence from colonial rule and to become arbiters of their own destinies.
  • The recent conference came against the backdrop of the historic third India-Africa Forum Summit in October 2015 when all 54 African nations had sent their representatives, 41 of them at the level of head of state or government.
  • African governments have also been appreciative of Indian leaders’ unprecedented readiness to visit Africa. In the past two years, the President, the Vice President and the Prime Minister have visited 16 African countries in the east, west, north and south.
  • India’s relations with African countries are surging ahead in the political, economic and multilateral spheres. To an extent, this reflects India’s recognition of the economic and political transformation of Africa in the recent years.

africa

Asia Africa Growth Corridor (AAGC)

  • The most important aspect of the meeting was the release of a vision document on the “Asia Africa Growth Corridor (AAGC)”. This study was jointly produced by three research institutions of India and Japan.
  • It envisages closer engagement between India and Africa for “sustainable and innovative development”, and will be anchored to four pillars:
  1. Development and cooperation projects.
  2. Quality infrastructure and institutional connectivity.
  3. Enhancing capacities and skills.
  4. People-to-people partnership.
  • The AAGC will accord priority to development projects in health and pharmaceuticals, agriculture and agro-processing, disaster management, and skill enhancement.
  • It will have special focus on the following geographies: Africa, India and South Asia, Southeast Asia, East Asia and Oceania. Studies indicates a preference for turning the 21st century into an Asian-African century, and not just an Asian century.

Genesis of the Proposal

  • The idea of a growth corridor linking Asia and Africa stemmed from discussions between Japanese Prime Minister Shinzo Abe and Indian PM.
  • Convinced of the rising importance of the Indo-Pacific region as “the key driver for prosperity of the world”, the two leaders decided “to seek synergy” between India’s Act East Policy and Japan’s “Expanded Partnership for Quality Infrastructure”.
  • This synergy would be reflected in better regional integration, improved connectivity and industrial networks. The strategy encompasses India-Japan collaboration for accelerating development in Africa together with other like-minded countries such as the United States, Germany, France and probably the United Arab Emirates and Singapore.

Different from China’s OBOR

  • There have been questions as whether this would be India’s answer to China’s One Belt One Road. However, e approaches of India and China towards Africa are essentially different. China concentrates on infrastructure and cheque-book diplomacy, whereas India promotes a broader spectrum of cooperation projects and programmes focussed on the development of Africa’s human resources.
  • Nevertheless, it should be reckoned that India and Japan do not have the luxury of time in view of China’s rapidly expanding footprint in Africa. An urgent need exists for them to increase the scope of their development projects, create synergy among themselves, engage proactively with other willing partners, and thus turn the concept of the AAGC into a viable reality.

Way ahead

  • Today, India and Africa are the most rapidly growing developing economies in the world. Africa is the continent of the future. India is a major emerging economy. As the global economy continues to recover only slowly from the global financial and economic crisis of 2007-8 and with signs that China may now be entering a phase of lower growth rates and more domestic oriented economic strategies, India and Africa together may well become the engines of growth for the entire world.
  • India can contribute its capital, skills and technological capabilities to sustain Africa’s growth. Africa in turn can support India’s growth through mutually beneficial resource partnerships and easier access to each other’s expanding markets. Africa is already one of India’s fastest growing markets and investment destinations. This trend is likely to continue.

Question: How India fare in Africa when compared with China? Do India and Japan can challenge China’s OBOR with Asia Africa Growth Corridor (AAGC)?

 

2.Too Many Regulations Are Ruining CSR (Live Mint)

 Synoptic line: It throws light on Corporate Social Responsibility (CSR) as mandated by Companies Act 2013.(GS paper III)

Overview

  • India’s Companies Act 2013 has introduced several new provisions which change the face of Indian corporate business; one of such new provisions is Corporate Social Responsibility (CSR). The concept of CSR rests on the ideology of give and take; the object of introducing the section was to promote corporate philanthropy to ensure that growth remains inclusive.
  • Companies take resources in the form of raw materials, human resources etc from the society. By performing the task of CSR activities, the companies are giving something back to the society.
  • While the intent was to keep the provision principle-based and flexible, the leakage between intent of the law, its drafting, its delegated interpretation, and its final execution by the company on the ground gives rise to concerns that it does not realize what it set out to accomplish.

About CSR

  • The term “Corporate Social Responsibility (CSR)” can be referred as corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare. The term generally applies to company’s efforts that go beyond what may be required by regulators or environmental protection groups.

csr

CSR provisions as per Companies act 2013

  • In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013.
  • As per the Company act 2013, the companies having Net worth of INR 500crore or more, or Turnover of INR 1000crore or more, or Net Profit of INR 5crore or more, during any financial year shall be required to maintain a Corporate Social Responsibility.
  • The Act encourages companies to spend at least 2% of their average net profit on CSR activities. The ministry’s draft rules define net profit as the profit before tax as per the books of accounts, excluding profits arising from branches outside India.

provision

 

Problems

  • CSR is fundamentally an inspirational exercise, and it is very difficult to legislate aspirations. Laws only set minimum standards, but do not create an impetus for positive action. For example, it would be difficult to require that companies build “excellent” schools; the legal requirement can be met merely by spending money on education.
  • The law lists only a few genres of CSR activities like “eradicating extreme hunger and poverty”, “promotion of education”, and “social business projects”. This is much too vague to work as a legal definition.
  • The CSR law does not go far enough in reducing inequality and helping the disadvantaged. Without a coercive enforcement mechanism, it is unlikely that the law will result in widespread compliance and real effectiveness. In other words, “required” CSR will remain largely voluntary, but give the illusion of progress.
  • It is the government’s responsibility to determine high-priority needs of society and target public expenditure in those areas. It is unlikely that the allocation of resources reflects the democratic will of the Indian people.
  • Apart from this, there are certain events, awards or charitable contributions that are not considered CSR-compliant. For example-
  • An average marathon generates over a million kilometres of health-inducing running just on marathon day and probably tens of millions of kilometres in the previous few days of training, contributing significantly to preventive health. But this is not CSR.
  • Charitable contributions for helping the disabled will change the lives of millions of affected people, but are not considered CSR-compliant.
  • Many large companies have substantially contributed to training law enforcement agents, for example in cyber security, where the public sector’s knowledge is limited. That is not CSR either, even though it significantly enhances the financial and economic security of the country.
  • India is urbanizing fast, and will witness the largest migration worldwide into urban centers over the next 20-30 years, yet “sustainable urban development” and contributions to enhance urban public transport systems are not CSR-compliant.

Way ahead

  • CSR is a controversial idea with many executives, academics and officials on both sides of the issue. Thus, it is not surprising that the Indian law does not clearly define CSR for the purposes of expenditures. Laws only set minimum standards, but do not create an impetus for positive action.
  • However Indian practice of CSR is an important component of sustainability or responsible business, which is a larger idea, a fact that is evident from various sustainability frameworks.
  • CSR in India has traditionally been seen as a philanthropic activity and in keeping with the Indian tradition, it was an activity that was performed but not deliberated. However, over the time a national character encapsulated within it embedded in the idea of trusteeship.

Question What reforms should be initiated in CSR rules to make them more objective and purpose oriented?

 

3.Can India build 20 Harvards in 20 years? (Live Mint)

 Synoptic line: It throws light on India’s scenario in higher education and certain issues which are plaguing it. (GS paper III)

Overview

  • Higher education in India is in deep crisis. Most Indian graduates are unemployable. Research in both the sciences and the humanities is generally below par. And even elite Indian universities do not make it to the very top of global listings.
  • Hence, government is seeking to change the situation by establishing 20 world-class “institutions of eminence” around the country.

State of Education in India

  • As we move towards an information age, nations around the world are grappling with what the next transformation in education needs to be. The current challenge in India remains a 20th century challenge of quantity and quality for its primary and higher education systems.
  • Indian institutions of higher education function at a sub-optimal scale compared with some of the best in the world.
  • However, the government’s supposed world-class “institutions of eminence” would be free of regulatory shackles and requires them to be globally competitive. If these institutions develop and deliver on these lines, eventually driving innovation and economic growth, they could potentially mark the beginning of a new chapter in India’s nation-building exercise.
  • If not, they will be the missed opportunity that sets back India’s aspirations to be a great power.
  • China makes for a good example. Since the late 1990s, it has made a concerted effort to revamp its tertiary education sector and link it to state power, as detailed in its 10th and 11th five-year plans. China reorganized the sector by merging small institutions into larger universities, marking out elite institutions for generous state funding (the top 11 universities received more than $2.56 billion from the government in the first phase alone), and changed its focus from quantity-oriented deliverables such as enrolment numbers to quality-oriented deliverables.

Indian Scenario

  • To be fair, there has been growth in India’s education sector too. Between 1950 and 2014, the number of universities has increased 34 times, from 20 to 677, while the number of colleges has increased 74 times, from 500 to 37,204, in about the same time, according to the Union ministry of human resource development.
  • Unfortunately, a vast majority of these institutions are little more than rubber stamps on degree certificates that aren’t worth the paper they are printed on. There are many reasons for this but essentially they can be summed up as: an excess of regulation in the name of good governance.
  • As the government sets up this new bunch of institutions, it will be interesting to see whether it addresses these fundamental structural problems that continue to hobble the Indian education sector.
  • Take, for instance, the manner in which scientific study has evolved in post-independence India primarily in research institutions not linked to a university. This was because in the early years after independence, the government of the day made a conscious decision to keep research institutes separate from universities which were meant to focus only on teaching.
  • Indeed, there was a robust debate on this issue between Homi Bhabha and Meghnad Saha. The former pushed for stand-alone research institutes to which scarce resources could be directed in a targeted manner while the latter argued that scientific research centres should be housed within universities. Bhabha won the debate at the time, but today Saha seems to have been vindicated.
  • Even though a handful of India’s scientific research centres, such as the Tata Institute of Fundamental Research, Inter-University Centre for Astronomy and Astrophysics, and the Indian Institute of Science have done good work, the universities have suffered considerably. In contrast, in the US today, research is integral to every university which serves as a hub of innovation and development.

Way ahead

  • An important reason why Chinese higher education has galloped ahead of India is that it strengthened its primary and secondary education systems first, which India is only now attempting to achieve. Consequently, Indian higher education became a victim of distributional politics which China appears so far to have by and large avoided.
  • In the long run though, it is important to mention that for any development in higher education to bear fruit, it will have to be supported by the strengthening of primary education.

Question What India can learn from USA where Universities and research institutions are linked together? Should India implement such model?

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